SANTA FE, N.M. (AP) -- The Human Services Department is shifting $7.5 million within its budget to cover start-up costs of Arizona companies that will take over for New Mexico behavioral health providers under investigation for potential fraud.

Matt Kennicott, a department spokesman, said Friday the budget adjustment is needed to pay for salaries, rent and other administrative expenses of the Arizona companies as they set up operations in New Mexico.

The department plans another budget transfer of about $10 million for contracts with the behavioral health companies.

The agency is moving the money from another part of its budget that pays for a broad range of expenses, including medical and behavioral health care for Medicaid recipients and some administrative costs of the program. Medicaid provides health care for a fourth of the state's population.

However, Kennicott said the agency isn't cutting Medicaid with the budget transfers for the behavioral health contracts.

The state has frozen payments to more than a dozen New Mexico providers while they are under investigation. However, lawmakers have expressed concerns that could disrupt mental health and substance abuse treatment for needy New Mexicans covered by Medicaid.

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The department has contracted with five Arizona companies to step in to prevent an interruption of services if the New Mexico providers run out of money and can no longer serve their Medicaid patients.

Kennicott said one transition is under way in southern New Mexico, with La Frontera Center Inc. taking over this weekend for the Southwest Counseling Center in Las Cruces.

Legislative Finance Committee Deputy Director Charles Sallee said the budget transfers shouldn't squeeze Medicaid because the program is running a surplus. However, he said the committee likely will hold a hearing to allow lawmakers to review the additional $10 million switch that's expected for the behavioral health contracts.

The department initially has planned an $18 million budget transfer but that was revised at the request of the committee, according to Sallee.

Agencies must get permission from the Department of Finance and Administration before making certain changes in their legislatively approved budgets. The Legislative Finance Committee can object to but not veto an administratively approved budget adjustment.

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